Contents S.NO. CONTENTS SLIDE NO. 1 Objectives of the Study 2. 2 Methodology 4. 3 Socio-Economic Profile of Tamil Nadu 7

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2 Contents S.NO. CONTENTS SLIDE NO. 1 Objectives of the Study 2 2 Methodology 4 3 Socio-Economic Profile of Tamil Nadu 7 4 Human Resource Requirement 19 5 Human Resource Availability 24 6 Youth Aspirations 28 7 Skill Gap 32 8 Recommendations 40 1

3 Objectives 2

4 Objectives of the Study The study objectives included the following at the state as well as the district levels: Socio-economic profiling demography, economic profile of district by industry and state of education. Identification of developmental opportunities keeping in mind factor endowments and stakeholder perspectives. Identification of specific developmental initiatives/projects which have an impact on employment generation. Articulation of the aspirations of the youth. Identification of the current and future (2012, 2017 and 2022) skills and human resource requirements by industry and estimate the gap that exists. Studying the existing VT infrastructure both in the private sector, and the government domain. Suggestion of suitable interventions/recommendations to address the skills gap. Development of specific and actionable recommendations. Recommendations were also to include specific initiatives that NSDC can take based on the mandate of the organization. Creation of an action plan 3

5 Methodology 4

6 Methodology RESEARCH METHODOLOGY The quantitative and qualitative gaps with regard to skill development were assessed through a combination of primary and secondary research methods SECONDARY RESEARCH Socio-economic profile of the districts examining population, sex ratio, literacy, major industries, growth of district GDP Existing infrastructure and state policies Data analysis for output, employment and growth drivers PRIMARY RESEARCH 25 Focus Group Discussions with 245 Youth 250 Field Surveys and Interviews with: Government Departments Industry Training Providers Youth Unorganized Sector 5

7 SOCIO-ECONOMIC PROFILE Demographic Profile Industry Profile Education and Training 6

8 SOCIO-ECONOMIC PROFILE Demographic Profile Industry Profile Education and Training 7

9 Socio Economic Profile of Tamil Nadu (1/5) Population Density Across Districts in 2011 Demographic Indicators (2011) Indicator Tamil Nadu India Population 7,21,38,958 1,21,01,93,422 Population Density (per sq km) Sex Ratio Literacy Male Literacy Female Literacy Source: Census 2011 (Provisional) Tamil Nadu performs better than the all India average in terms of sex ratio and literacy Source: Census

10 SOCIO-ECONOMIC PROFILE Demographic Profile Industry Profile Education and Training 9

11 Socio economic profile of Tamil Nadu (3/5) Economic Performance in FY 2012 Sectoral Composition of GDP in Tamil Nadu Tamil Nadu s NSDP was nearly Rs lakh crore in , approximately 7.72% of the national domestic product. The state economy grew at 9.39% in , as compared to India s GDP growth of 6.5%. Per capita income at current prices is Rs. 84,058, higher than the national average of Rs. 60,603 The share of the services sector in the economy is steadily growing Source: Reserve Bank of India (2012), Tamil Nadu Statistical Handbook (2012), Tamil Nadu Vision 2023 (2011) 10

12 Socio Economic Profile of Tamil Nadu (4/5) Chennai Kancheepuram Thiruvallur Coimbatore Tiruppur Tiruchirappalli Vellore Salem Madurai Thanjavur Erode Tirunelveli Kanniyakumari Cuddalore Namakkal Viluppuram Tiruvannamalai Dindigul Nagapattinam Virudhunagar Thoothukkudi Pudukkottai Thiruvarur Krishnagiri Karur Theni The Nilgiris Dharmapuri Ramanathapuram Sivaganga Ariyalur Perambalur 21,820 21,391 21,379 19,451 18,328 14,337 14,172 13,394 11,380 10,854 10,338 10,060 9,575 8,910 8,187 7,786 7,636 7,215 6,654 6,648 5,950 5,182 5,130 5,021 4,864 4,799 2,776 2,170 District GDP in INR Crore, ,376 39,924 35,411 91, ,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 1,00,000 Source: Indicus Analytics Market Skyline of India (2011) The contribution of the top 4 districts to state GDP is 42.8%. Chennai s GDP is nearly six times the state average. The lowest 16 districts account for 32% of the population and 20% of the state GDP. 11

13 Socio Economic Profile of Tamil Nadu (5/5) Industrial Clusters, 2009 Source: Department of MSME (2009) 12

14 SOCIO-ECONOMIC PROFILE Demographic Profile Industry Profile Education and Training 13

15 Socio Economic Profile of Tamil Nadu (2/5) Education Infrastructure (2011) Institution Number Capacity Enrolment Primary Schools 34,871 62,17,720 61,16,793 Middle Schools 9,969 38,58,974 36,80,471 High Schools 5,167 28,40,569 23,08,530 Higher Secondary Schools 5,660 16,39,677 15,03,033 Arts & Science Colleges 633 9,70,009 7,35,407 Polytechnics 351 1,64,575 1,18,340 Engineering Colleges 491 1,95,324 1,62,231 ITIs, ITCs and other Registered Training Institutes 1,747 2,19,494 1,53,646 Drop-outs in Lakhs Primary/Junior Middle /Senior Higher Secondary College Source: Sarva Shiksha Abhiyan, Department of Employment and Training, Department of Higher Education (2011), Athena Research 14

16 Tamil Nadu has a total of 62 Government ITIs Courses are offered for 39 engineering trades and 17 nonengineering trades, varying in duration from 6 months to 3 years 51,000 applications are received each year, of which 23,000 students are admitted The state also has 672 ITCs with a total seating capacity of 60,320 across 110 trades 933 industrial schools offer courses varying in duration from 45 days to 2 years The state also has 118 community colleges under IGNOU Source: Government of Tamil Nadu (2011), Athena Research Vocational Training Infrastructure (1/2) 15

17 Vocational Training Infrastructure (2/2) Low per capita availability of training infrastructure Moderate per capita availability of training infrastructure High per capita availability of training infrastructure VT infrastructure is distributed unevenly across the state. It is low in districts with a low level of industrialization and sparse population. In per capita terms, Cuddalore, Dharmapuri, Erode, Kanniyakumari, Perambalur, Pudukkottai, Sivaganga, Thanjavur, Theni and Tiruchirappalli have high availability of VT infrastructure. Ariyalur, Krishnagiri, Thiruvallur, Thoothukkudi and Tiruppur have relatively low per capita availability of VT infrastructure. Source: Government of Tamil Nadu (2011) 16

18 SECONDARY SECTOR TERTIARY SECTOR Overview of State Schemes (1/2) Education: Target: General Programmes: teacher training Capacity: 49,000 candidates per year Information Technology: Target: General Programmes: IT Capacity: NA Tourism and Culture: Transport: Target: General Target: General Programmes: Guide Programmes: Heavy training programme, hotel vehicle driving, light management, hospitality vehicle driving, aircraft and logistics flight and maintenance Capacity: 3,337 Capacity: NA candidates per year Handlooms, Handicrafts, Textiles and Khadi: Target: Artisans, khadi workers Programmes: Brass and copper item manufacturing, palm product manufacturing Capacity: 77 candidates per year Micro, Small and Medium Enterprises: Target: 8 std pass, unemployed youth Programmes: tool engineering, ceramic technology, glass training Capacity: 49,487 candidates per year Cooperatives: Target: 8 std pass, unemployed youth Programmes: management Capacity: 1,241 candidates per year Source: Government of Tamil Nadu Policy Notes (2011) 17

19 WELFARE PRIMARY SECTOR Overview of State Schemes (2/2) Agriculture: Target: Farmers Programmes: Pest management, agro processing, marketing, seed training, entrepreneurship development Capacity: 43,970+ candidates per year Adi Dravidar and Tribal Welfare: Target: Tribals Programmes: Textiles, leather, hospitality, health, soft skills and language Capacity: 25,000 candidates per year Animal Husbandry, Dairying and Fisheries: Target: Farmers, fisherfolk Programmes: Management, marketing, Maritime education Capacity: Fisheries 3200 candidates per year Welfare of Differently Abled Persons: Target: Differently Abled Programmes: Medical technology, electronics, computers, teacher training, book binding, teacher training, chalk training, weaving Capacity: 456 candidates per year Environment and Forests: Target: General Programmes: forest management Capacity: NA Social Reforms: Target: Disadvantaged women and children Programmes: Teaching, tailoring, computers, beautician, baking, wire bag manufacture, knitting, services, repair Capacity: 800 candidates per year Rural Development: Target: Rural poor and government officials involved in programme implementation Programmes: Enterprise development, multiple skilling programmes, Pudhu Vazhu Project Capacity: 1,90,063 candidates trained so far Source: Government of Tamil Nadu Policy Notes (2011) 18

20 Human Resource Requirement 19

21 Incremental Human Resource Requirement (1/4) Incremental Human Resource Requirement by Industry in (in 000s) Service sector driven growth on account of rising demand for infrastructure and support services with growth of businesses Strong growth expected in the textile sector across districts High growth expected in chemicals on account of the setting up of PCPIR along the Cuddalore - Nagapattinam coast High auto growth around Chennai expected due to strategic location and availability of multi modal transport. Gradual growth of human resource requirements in other automotive hubs such as Coimbatore and Erode. High proportion of unskilled resources in highly laborintensive sectors The largest human resource requirement for skilled resources will arise in service sectors such as IT/ITES, BFSI, healthcare and education Source: Athena Research 20

22 Incremental Human Resource Requirement (2/4) Incremental Human Resource Requirement by Industry in (in 000s) Gradual substitution of unskilled resources with semi skilled resources expected in industries showing a trend towards higher formalization Industry trends suggest increasing growth and organization of retail Strong demand for services expected to accompany economic growth in other sectors Highest semi skilled and skilled human resource requirement is expected in Chennai, Kancheepuram, Thiruvallur, Madurai and Coimbatore. 14 Source: Athena Research 21

23 Incremental Human Resource Requirement (3/4) Incremental Human Resource Requirement by District (in 000s) INCREMENTAL HUMAN RESOURCE REQUIREMENT (in 000s) UNSKILLED SEMI SKILLED SKILLED TOTAL UNSKILLED SEMI SKILLED SKILLED TOTAL Ariyalur Chennai Coimbatore Cuddalore Dharmapuri Dindigul Erode Kancheepuram Kanniyakumari Karur Krishnagiri Madurai Nagapattinam Namakkal Perambalur Pudukkottai

24 Incremental Human Resource Requirement (4/4) Incremental Human Resource Requirement by District (in 000s) INCREMENTAL HUMAN RESOURCE REQUIREMENT (in 000s) UNSKILLED SEMI SKILLED SKILLED TOTAL UNSKILLED SEMI SKILLED SKILLED TOTAL Ramanathapuram Salem Sivaganga Thanjavur The Nilgiris Theni Thiruvallur Thiruvarur Thoothukkudi Tiruchirappalli Tirunelveli Tiruppur Tiruvannamalai Vellore Viluppuram Virudhunagar

25 Human Resource Availability 24

26 Human Resource Availability Estimation of Human Resource Availability for Tamil Nadu Total Population 8,01,49,059 Total Population 8,82,38,256 Working Age Population 5,27,71,262 Working Age Population 5,77,13,558 Labour Force 3,43,37,314 Labour Force 3,83,11,449 Work Force 3,35,73,476 Work Force 3,75,07,488 Incremental human resource availability is estimated to be lakh in and lakh in

27 Incremental Human Resource Availability Incremental Human Resource Availability by District (in 000s) The decline of the crude birth rate is likely to lead to moderate population growth over the next decade. The highest incremental human resource availability at the semi skilled level is expected in Chennai, Kancheepuram, Tiruchirappalli, Coimbatore and Tirunelveli. The largest human resource availability at the skilled level is expected to be in Coimbatore, Kancheepuram, Chennai, Madurai and Vellore. 26

28 Incremental Human Resource Availability Incremental Human Resource Availability by District (in 000s) The availability of semi skilled resources is low in districts such as Dindigul, Namakkal and Sivaganga. The availability of human resources across skill levels is low in districts such as Ariyalur, Perambalur and Thiruvarur. The Nilgiris has seen a negative growth in population over recent years, leading to negative growth in human resource availability. 27

29 Youth Aspirations 28

30 Incremental Manpower Potential Youth aspirations mismatch between industry demand and aspirations (1/3) High Leather, Construction, Food Processing Textiles, Media & Entertainment Automobile, IT & ITES, Travel & Tourism, Retail, BFSI Gems & Jewellery, Chemicals & Pharmaceuticals, Furniture Transport & Logistics, Healthcare Electronics Hardware Agriculture, Handloom & Handicrafts Real Estate Education Low Low Youth Aspirations across Sectors High Source: Athena Research 29

31 Youth aspirations mismatch between industry demand and aspirations (2/3) Districts with High Youth Aspirations and High Human Resource Requirement by Industry Source: Athena Research 30

32 Youth aspirations mismatch between industry demand and aspirations (3/3) Youth Aspirations Infrastructure Availability Industry Demand Engineering Engineering Engineering Goods IT, ITES IT, ITES IT, ITES Automobile Automobile Automobile Electronics Hardware Electrical Electronics Hardware Retail Retail Retail Hospitality Hospitality Transport Transport BFSI Textiles Textiles Leather Construction Food Processing Source: Athena Research GAPS: Leather, Construction, Food Processing Youth aspirations and infrastructure creation for skill development are correlated There are gaps between industry demand and youth aspirations There is a need for skill infrastructure and targeted student mobilization activities through awareness campaigns and student interactions in sectors such as leather, construction and food processing. 31

33 Skill Gap 32

34 Quantitative Skill Gap SKILL GAP (in 000s) Incremental Human Resource Requirement UNSKILLED SEMI SKILLED SKILLED TOTAL UNSKILLED SEMI SKILLED SKILLED TOTAL 1,718 1,511 1,896 5,125 3,313 2,440 2,807 8,560 Incremental Human Resource 2, ,065 3,502 2, ,137 3,934 Availability Skill Gap , , ,162 1,655 4,626 The highest skill gaps are likely to arise in the most rapidly industrializing districts of Kancheepuram, Chennai and Thiruvallur. The largest skill gap is expected to arise at the semi skilled level. There is an excess availability of unskilled human resources in Enrolment trends and primary research suggest that unskilled human resources are more likely to become skilled rather than semi skilled. This will cause the skill gap at the semi skilled level to persist. Source: Athena Research 33

35 Summary of Skill Gap in Tamil Nadu ( ) Incremental Human Resource Requirement Incremental Human Resource Availability Deficit Of Human Resources L Skilled L 8.31 L L Semi-skilled 2.58 L L L Unskilled L (4.61) L Note: Figures in parentheses indicate excess availability Total Incremental Requirement: L Total Incremental Availability: L Source: Athena Research 34

36 Summary of Skill Gap in Tamil Nadu ( ) Incremental Human Resource Requirement Incremental Human Resource Availability Deficit Of Human Resources L Skilled L L 24.4 L Semi-skilled 2.78 L L L Unskilled L 8.1 L Total Incremental Requirement: 85.6 L Total Incremental Availability: L Source: Athena Research 35

37 District-wise Quantitative Skill Gap SKILL GAP (in 000s) UNSKILLED SEMI SKILLED SKILLED TOTAL UNSKILLED SEMI SKILLED SKILLED TOTAL Ariyalur Chennai Coimbatore Cuddalore Dharmapuri Dindigul Erode Kancheepuram Kanniyakumari Karur Krishnagiri Madurai Nagapattinam Namakkal Perambalur Pudukkottai

38 District-wise Quantitative Skill Gap SKILL GAP (in 000s) UNSKILLED SEMI SKILLED SKILLED TOTAL UNSKILLED SEMI SKILLED SKILLED TOTAL Ramanathapuram Salem Sivaganga Thanjavur The Nilgiris Theni Thiruvallur Thiruvarur Thoothukkudi Tiruchirappalli Tirunelveli Tiruppur Tiruvannamalai Vellore Viluppuram Virudhunagar

39 PREFERENCE MISMATCH Qualitative Skill Gap (1/2) Low interest in traditional, labor-intensive sectors such as handloom & handicrafts, gems & jewelry and leather Preference for service sector industries such as hospitality and retail Low supply of labor at lower skill levels due to preference for white collar jobs. Excess supply of skilled labor. QUALITATIVE MISMATCH Skill sets do not match educational attainment High attrition preventing assimilation of skills Lack of industry exposure High variation in quality of work force Unwillingness to migrate INFORMATION ASYMMETRY Lack of awareness regarding skill development and qualifications required by industry Mismatch between job expectations and work conditions Low collaboration between industry and training providers for curriculum development Source: Athena Research 38

40 Qualitative Skill Gap (2/2) QUALITY OF TRAINING Unavailability of quality trainers Outdated equipment used for training Poor basic education preventing absorption of vocational education DISINCENTIVES FOR SKILL ACQUISITION Low access to skill training providers Lack of guidance regarding skill development Opportunity cost of skilling in terms of loss of employment and wages Lack of mobility between formal and vocational education Career progression not institutionalized ATTITUDES AND PREFERENCES Low dignity associated with blue collar jobs Preference for formal education Socio-economic constraints for skilling of women Source: Athena Research 39

41 Recommendations 40

42 Recommendations (1/4) Stakeholder Recommendation Functions Implementation Establishment of District Skill Development Councils Ranking of Skill Training Providers 1. Data Collection 2. Information Dissemination 3. Skills Registry and Placements 4. Identification of Skill Gaps 1. Creating an incentive for institutes to register themselves 2. Encouraging greater competition 3. Information dissemination 1. DSDCs established with TNSDM as the nodal agency 2. Use of existing infrastructure by revamping employment exchanges 3. Supervising the implementation of skill development initiatives at the district level 1. Choosing parameters for ranking institutes 2. Rankings by an independent third party 3. Publication of rankings in major newspapers 4. Regular update Equivalence between Formal and Vocational Education 1. Allowing mobility across educational institutions 2. Clarity on skill attainment associated with courses 3. Benchmark for wages 1. Market Survey 2. Benchmarking using Occupational Standards 3. Equivalence State Government ATIs on PPP Mode Teachers' Training on PPP Mode Unorganized Sector Interventions 1. Collaboration between industry and government 2. Improved placements through industry linkages 3. Relevance of curriculum 1. Ensuring availability of trainers 2. Improving quality of training delivery 3. Development of standardized tests and certifications for trainers 1. Providing a means for transitioning from informal to formal employment 2. Awareness of skill development 1. Focus on industrialized districts for sectors such as auto, electronics and textiles 2. Value for Money analysis 3. Standardized course content through SSC inputs 4. Higher industry interaction 1. Focus on developing districts 2. Industry training as part of the curriculum 3. Inclusion of soft skills and the use of technology to facilitate learning 4. Refresher courses for those already employed as trainers 1. Review of basic concepts as part of course 2. Minimize opportunity cost 3. Formal recognition of informally acquired skills 4. Multi-skilling 5. Skill vouchers 41

43 Recommendations (2/4) Stakeholder Recommendation Functions Implementation 1. Improvement in working conditions for blue collar Institutionalization of Career workers Progression for Lower Skill Levels 2. Creation of incentive for employees to acquire skills 3. Correspondence between wages and skills 1. Development of industry norms for compensation commensurate to skill levels 2. Wage revision to reflect experience and skill acquisition 3. Communication of work standards to employees Industry 1. Ensuring marketability of skills imparted Involvement in Skill Development 2. Relevance of training to industry 3. Stronger training-industry linkages On the Job Training 1. Optimizing infrastructure creation 2. Improving productivity 3. Standardization of output 1. Participation in campus recruitments 2. Internships, apprenticeships, guest lectures and industrial visits 3. Feedback on curriculum and training, especially for the service sectors 1. Induction programs and short-term training modules for new hires 2. Partnerships with skill training providers for upskilling 3. Earn while you learn schemes Improvement in Work Conditions 1. Improving dignity of labor 2. Reducing attrition 3. Facilitating assimilation of skills 1. Part compensation in kind to reduce attrition 2. Employee feedback systems 3. Bonuses for completing one year in employment 4. Safety equipment and suitable gear for hazardous jobs 42

44 Recommendations (3/4) Stakeholder Recommendation Functions Implementation Orientation Programs 1. Clarity on course content and expected employment 2. Rationalization of job expectations 3. Industry orientation 1. Interactions with alumni and faculty 2. Aptitude tests for service sector jobs 3. Designated point of contact for students to obtain clarifications regarding employment and career Industry Collaboration 1. Improving placements 2. Ensuring relevance 3. Industry exposure for students 1. Periodic market surveys 2. Regular industry interactions 3. Mandatory/ dual apprenticeships and internships 4. SSC inputs on curriculum design and pedagogy Training Providers Student Mobilization 1. Improved awareness of skill development initiatives 2. Increased student mobilization 1. Talks and interactive sessions at schools and work places 2. Focus on up-skilling 3. Targeted campaigns for women in socially backward districts Certification of Informally Skilled People 1. Formalization of informally acquired skills 2. Information dissemination through word of mouth 1. Tests for certification of skills 2. Targeted advertising campaigns, particularly for the unorganized sector Career Counselling for Students 1. Realistic job expectations 2. Improved job matching 3. Lower attrition 1. Counselling before commencement of recruitment process 2. Alumni interactions 43

45 Recommendations (4/4) Stakeholder Recommendation Functions Implementation NSDC Establishment of Training Providers' Association Funding Initiatives Sector Skill Councils Collaboration with State Government 1. Aggregation of information on private skill training providers 2. Provision of a common platform for training providers to facilitate dialogue 3. Better targeting and resolution of qualitative issues 1. Bridging existing qualitative and quantitative skill gaps 1. Standardization and quality control for different industries 2. Bridging information gaps among students, training providers and industry 1. Avoiding duplication of effort 2. Cross pollination through exchange of ideas 1. Media advertising to encourage training providers to join the association 2. Constitution of a board of representatives chosen by the members 3. Conferences and workshops to encourage dialogue and discussion 1. Training for service sectors such as tourism, hospitality and retail at the work place interspersed with theory classes 2. Standardized curriculum for manufacturing trades through SSC involvement 3. Initiatives for skilling women through community skilling models in backward districts 4. Entrepreneurship development for economically backward districts 5. Use of existing infrastructure where capacity utilization is low 6. Training the trainers and developing standardized evaluation through SSCs 1. Inclusion of unorganized sector representatives in SSC boards 2. Development of sector skill development plans for growing sectors such as logistics, maritime and food processing 3. Accreditation and Testing 4. Advanced Training Institutes 1. Conferences, seminars and workshops to facilitate greater dialogue 2. Exchange of information on successful business models and planned capacity additions. 3. Coordination of skilling efforts. 44

46 About Athena Athena is a public policy and management consulting firm which blends research insights with experiential knowledge to address developmental, growth and strategy issues of our clientele. Our capability to generate new and actionable knowledge is the primary driver of our business. Pursuit of new ideas, solutions and strategies through continuous research is central to our consulting operations. Vijay Bhalaki Director Athena Infonomics vb@athenainfonomics.in Sandhya Srinivasan Consultant, Public Policy Athena Infonomics sandhya@athenainfonomics.in Athena Infonomics India Pvt. Ltd. 6th Floor, B Block, , Mena Kampala Arcade, Sir Theagaraya Road, T.Nagar, Ph: /13, Chennai Fax:

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